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By RICK BRUNDRETT
The $1 billion taxpayer-funded gift that S.C. lawmakers last year approved for the Scout Motors electric vehicle plant was seven times more than what officials in Mississippi, which lost out to South Carolina, were willing to offer in state grant funding through special legislation, records obtained by The Nerve show.
And, in addition to the vehicle assembly plant, Scout Motors, which German-based Volkswagen created in 2022, sought Mississippi incentives for a battery cell production “giga” factory, according to the company’s incentives wish list, known as a “request for proposal” (RFP), which The Nerve obtained earlier last month from the Mississippi Development Authority (MDA) under that state’s open-records law.
Meanwhile, Virginia-based Scout Motors on Wednesday filed a petition – which named The Nerve’s editor multiple times – in a Jackson, Miss., court seeking an immediate protective order that would ban “public production, in response to the pending records request and future requests, of unredacted copies of the RFP.”
“The information was exchanged for the sole purpose of assessing the potential for a business arrangement between Scout Motors and the State of Mississippi,” Christopher Condon, the company’s chief financial officer, said in an affidavit that was included with the protective order petition. “Otherwise, Scout Motors keeps such information confidential and out of the public domain.”
The petition identified projected “funding, taxes, exemptions, credits, and similar financials” offered by the Mississippi Development Authority as “proprietary and confidential information” contained in the incentives wish list.
As The Nerve pointed out, however, in a story Wednesday about Scout Motors’ notice of intent to file a protective order petition, there is no “pending records request” by The Nerve given that the Mississippi Development Authority on Jan. 10 released the company’s RFP, which contained redactions, based on an open-records request initially made on Dec. 6.
Wednesday’s story cited a letter to Scout Motors’ attorneys from Alan Dye, an attorney with the Washington, D.C.-based Webster, Chamberlain & Bean law firm, which represents the South Carolina Policy Council – The Nerve’s parent organization – who said the Policy Council would fight any legal action taken against The Nerve.
In a letter today to Dye in response to Wednesday’s story and Dye’s letter, Jason Fortenberry, one of Scout Motors’ lawyers in Jackson, Miss., denied that Scout Motors threatened to file a protective order petition if The Nerve didn’t drop or revise its request for information, or if The Nerve published information that it had already received. Instead, Fortenberry said, the company is “exercising its statutory right to prevent disclosure of confidential information that your client has not received and is not entitled to receive.”
“The Nerve is entitled to notice of Scout Motors’ Petition, but your client is not a necessary party to Scout Motors’ lawsuit,” Fortenberry informed Dye, adding that The Nerve is “free to review, hold, or publish the unredacted information that has been provided by the MDA, and Scout Motors is neither requesting nor demanding that you relinquish or withhold any such information.”
The protective order petition named The Nerve’s editor nine times. The formal notice of intent to file the petition, which was submitted to The Nerve on Jan. 24, named The Nerve’s editor four times.
In their written response included in the incentives wish list submitted by JLL Inc., a Chicago-based, real-estate services firm representing Scout Motors, Mississippi officials said if the company, identified only in the document by its code name “Project Connect,” selected the Magnolia State, the state would “initiate special legislation” for $150 million in Mississippi Major Economic Impact Authority (MMEIA) “Inside the Fence” grant funding. The MMEIA is under the “purview” of the Mississippi Development Authority, according to the RFP.
Scout Motors gave the state an Oct. 1, 2022, deadline to respond to its 53-page incentives wish list.
Scout Motors in the RFP noted that the “cooperation/revenues of both companies” – the proposed vehicle assembly plant and the battery cell production “giga” factory – would be “limited to app. 25%.” The South Carolina RFP didn’t specify the proposed battery plant.
In comparison, the S.C. Legislature in just one week last March approved $1.09 billion in state surplus funds – seven times more than the proposed $150 million in Mississippi state grant funding – for the Scout Motors project in Richland County, identified only in the joint resolution by its “Project Connect” code name.
In addition, the legislation authorized another $200 million in state surplus funds to the S.C. Department of Commerce to loan to Scout Motors. The total $1.29 billion appropriation works out to be about $240 for every man, woman and child in South Carolina, as The Nerve noted in a June story revealing details of Scout Motors’ incentives agreements.
Wish list details
As The Nerve revealed in October, Scout Motors’ South Carolina incentives wish list, which was submitted through JLL Inc., served as the framework for the taxpayer-backed incentives later approved by state and local government officials. The Nerve obtained the RFP, which gave S.C. officials a deadline of Jan. 6, 2023, to respond, as part of nearly 1,000 emails provided by the town of Blythewood, where the assembly plant is being constructed, under the S.C. Freedom of Information Act.
State and local officials in the October story acknowledged that companies seeking to locate or expand in South Carolina routinely submit written incentives wish lists for major projects.
That story also revealed how state and local officials, including Gov. Henry McMaster, kept the Scout Motors project secret from the public for months. Eight days after the story was published, Blythewood voters overwhelmingly ousted incumbent town Mayor Bryan Franklin.
Following a meeting in Washington, D.C. on Oct. 25, 2022, involving a Scout Motors official and representatives from the S.C. Governor’s Office and the state Department of Commerce, Commerce officials learned that the company was “interested” in the Palmetto State for its electric vehicle plant, according to records obtained for the October story.
That meeting occurred 24 days after the listed deadline by Scout Motors to Mississippi officials to respond to the company’s incentives wish list.
The proposed $150 million in Mississippi state grant funds, had the state been selected, would have been designated for “infrastructure needs, site preparation costs, relocation of machinery, equipment, and key personnel, workforce recruitment and training assistance, or other project costs negotiated between” the company and the Mississippi Development Authority, according to the Mississippi RFP. The document identified Marshall County in northern Mississippi as the local funding entity.
“The company could direct grant assistance funds to areas of greatest need,” Mississippi officials wrote in the RFP.
Mississippi officials in the RFP projected that total funding of up to $100 million would be needed for the construction of two highway interchanges and separate site preparation work. It was unclear in the document whether certain projects with estimated price tags would have been covered under the proposed $150 million in state grant funding or with other public funds.
In comparison, under the S.C. legislation – which was passed less than two weeks after Scout Motors publicly announced the Richland County project last March 3 – the nearly $1.1 billion in state surplus funds can be used for such things as land acquisition, a rail spur bridge, road “access and improvements,” soil “stabilization,” water and wastewater infrastructure, a training center and “any other such purpose as is necessary and recommended” by the state Department of Commerce.
As The Nerve revealed in June, although the state incentives agreement requires that Scout Motors create a minimum 4,000 jobs and invest at least $2 billion at the town of Blythewood site over eight years, the deal allows the company itself to create a minimum 400 jobs and invest at least $400 million, with the differences to be made up by company “affiliates” and “counted suppliers.” And as many as 400 positions could be “badge” employees, such as janitors, security officers and cafeteria workers, employed by third parties, under the agreement.
The incentives wish lists submitted to South Carolina and Mississippi contain a plethora of requests, such as cash grants, highway interchanges, a test track and commercial helipad, a truck staging area, a 40,000-square-foot training center along with taxpayer-funded employee training and recruitment, a state-constructed daycare center for employees, and various state and local tax breaks.
Both RFPs also specified that state and local officials comply with the “German Supply Chain Due Diligence Act,” which deals with environmental, human rights and property rights issues. As The Nerve previously reported, some legal observers have characterized the law as reflecting the “environmental, social and governance” (ESG) movement.
But there are some differences between the incentives wish lists.
For example, when it came to limiting potential competitors near the selected site, both RFPs sought to ban automotive “original equipment manufacturers” within 45 miles of their respective locations. But although the South Carolina incentives agreement prohibits providing “discretionary” incentives or credits to “competitive vehicle production facilities” within 75 miles of the Richland County site for two years after Scout Motors started production, Mississippi officials rejected the company’s anti-competition request, writing in its RFP, “The State of Mississippi does not ascribe to placing limits on commerce or trade.”
In a Jan. 23 email, The Nerve asked Scout Motors’ president and CEO Scott Keogh whether South Carolina’s $1 billion-plus appropriation for the project compared to the proposed $150 million in Mississippi state grant funding was the deciding factor in choosing the Palmetto State. The RFP that the Mississippi Development Authority released to The Nerve was attached to the email.
Keogh did not respond. The next day, The Nerve received a notice of intent from Scout Motors’ lawyers in Jackson, Miss., to file a protective order petition.
‘Confidential and proprietary’
In the petition filed Wednesday in the Hinds County Chancery Court in Jackson, Miss., Scout Motors contended that the Mississippi RFP “contains a variety of confidential and proprietary information,” and that the company “keeps such information confidential to avoid its abuse or manipulation.”
“If a fully unredacted copy of the RFP were to become public, Scout Motors’ hard-earned competitive advantage would be lost,” the petition stated, adding, “Accordingly, the Court should enter an order that protects the RFP from full, unredacted public disclosure.”
In his response letter Wednesday to Scout Motors’ attorneys, Dye said The Nerve obtained information about the company’s Mississippi incentives wish list through a “perfectly proper public records request,” and that after about a month of “consideration by the (Mississippi) Development Authority’s counsel, The Nerve received documents which redacted all proprietary information contained in the requested documents.”
“Therefore, it is under no obligation not to disclose the information provided,” Dye wrote.
Dye advised the attorneys that The Nerve would publish stories on details of the Mississippi proposed incentives compared to South Carolina’s offer “for the benefit of the South Carolina public,” as well as stories about any legal actions taken against The Nerve.
Brundrett is the news editor of The Nerve (www.thenerve.org). Contact him at 803-394-8273 or [email protected]. Follow The Nerve on Facebook and X (formerlyTwitter) @thenervesc.
Nerve stories are free to reprint and repost with permission by and credit to The Nerve.